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Spanish Tax Law: what is new in 2016

Spanish Tax Law: what is new in 2016
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2016 is a year of big expectations for Spain. Due to the recent reforms Spanish authorities count to collect 75.400million euros from IRPF (the Spanish tax on revenues) and more than 62.000million euros only from IVA (value-added tax), reaching those amounts for the first time in the Country’s history.

This forecast could come to reality as a consequence of the innovations that recently involved Spanish tax system and that focus on boosting consumptions and productivity.

Let’s take a look to the major changes affecting the single taxes:

Value-added Tax (IVA)

VAT remains stable at 21%, remaining at EU average levels. This means that the raise in the collection that the authorities want to achieve would wholly be as consequence of the expected economic growth.

General tax on revenues (IRPF)

It is foreseen an increase in the collection of this tax of around 3,4%. This is expected to happen despite the tax rates has been lowered, showing clearly that Spain is moving toward a tax system sensitive to incentive. In particular the rates will reduce, passing from 24.75% to 19% for the lowest section and from 52% to 45% for the highest.

Corporate Tax (IS)

Corporate income it’s the revenue that has been affected the most by the recent reforming process. From the 1st of January 2015 is in fact in force the new law of corporate tax (ley 27/2014) that redesigns many fundamental feature of corporate income, making its collection simpler and more reasonable.

The most evident difference it’s the abatement of the general rate that passed from 28% in 2015 to 25% in 2016. Newly incorporated entities can also benefit of a reduced rate for their first two years of activity, set at 15%.

Savings

About the revenues originated by savings, that are a special partition foreseen by Spanish IRPF, including interests and dividends, a reduction has as well taken place. The current rates are 19% for the first 6.000 eur, 21% from 6.000 to 50.000 and 23% from 50.000 onwards.

 

Navas & Cusí Lawyers.